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VERIFY: What is 'price gouging?'

All over social media, people are posting about inflated gas prices across the country amid the Colonial Pipeline shortage.

WASHINGTON — First it was toilet paper, now it’s gasoline; people are going out in droves trying to fill up their tanks. 

The fuel fever was so high that the U.S. Consumer Product Safety Agency tweeted out a simple, yet serious warning: "do not fill plastic bags with gasoline.”

All over social media, people are posting about inflated gas prices across the country.

Basic economics teaches that supply and demand go hand in hand. When demand exceeds supply, people are willing to spend more for the products they want.

But when those goods are charged at an exorbitant cost, typically during or after a disaster, that's when price gouging laws come into play.

THE QUESTION:

What is price gouging and how can you report it?

THE ANSWER:

The exact legal definition will vary from state to state. The general idea is that when a merchant sells a good for a higher price, when demand is high, typically during an emergency.

Those who see price gouging should contact their state Attorneys General's Office.

OUR SOURCES:

John Townsend- manager of public and government affairs, AAA mid-Atlantic

Allison Mac- analyst at GasBuddy 

Jennifer Granholm- Secretary of Energy

WHAT WE FOUND: 

"Price gouging is charging an inordinate amount for gasoline, or even other consumer products, in the wake of an emergency," Johh Townsend, AAA's mid-Atlantic manager of public and government affairs said. 

Allison Mac, an analyst at GasBuddy agreed.

"Price gouging is when a company takes advantage of the consumer during a time of need," Mac said.

Our experts say small increases to the gas price during times of low supply is expected. But if it starts jumping way up, that’s when price gouging might be happening. 

"Find out what the price was last week and what the price is this week, and compare that with the other prices that gas stations are charging in the District," Townsend gave this example for D.C. motorists. "And if it's disproportionate, and it's exorbitant, that's a telltale sign of price gouging."

RELATED: VERIFY: 3 Things to know about the Colonial Pipeline shutdown

"There is no shortage in fuel, we still have a lot of fuel in this country it is really just about getting the fuel from the refineries over to the station," Mac said. "So definitely a huge warning for a lot of the consumers out there buying gas, if they do see prices suspiciously high, that is when they really should be reporting that station to to government officials."

The legal definition for 'price gouging' will depend state by state. According to a list published by the National Conference of State Legislatures in March of 2020, 36 states and Washington, D.C. all have statutes or regulations pertaining to price gouging during a public emergency.

During COVID, Maryland's governor for instance, signed an executive order specifically outlawing retailers from selling or renting certain items "to a price that increases the retailer's value of profit by more than 10%." Fuel was one of those items.

If you see price gouging, who should you report it to?

Your first call should be to the attorney general in your area.

"We will have no tolerance for price gouging," Secretary of Energy Jennifer Granholm said during a White House press conference on May 11. "Federal and state officials will be investigating those actions if they see price gouging, and we are urging consumers to report any price gouging to their state attorneys general.”

So if you see gas prices skyrocket, that could be price gouging and your first call should be to the attorney general in your area.

In Maryland, you can file a complaint online, by mail or by calling their consumer hotline: (410)-528-8662.

In Virginia, you can file a complaint about price gouging with the AGs office online, except for "motor fuels" complaints which needs to be filed with the Virginia Department of Agriculture and Consumer Services, Office of Weights and Measures. They also have a consumer hotline: (800)-552-9963 if calling within Virginia, and (804)-786-2042 if calling from the Richmond area or outside the state.

In the District of Columbia, you can submit a complaint online, email consumer.protection@dc.gov or call them at (202)-442-9828

Worth noting, we have seen gas prices continually go up over the last few weeks. It’s jumped another 10 cents across the DC Metro, and eight cents nationwide, in just the last week.

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